Abstract
This study explores the long-run determinants of electricity theft in Pakistan using annual time series data from 1970 to 2010. ARDL approach to co-integration has been employed to find the long-run co integrating relationship among electricity theft, per capita income, electricity price, number of consumers and economic openness. The estimated results confirm the existence of long run association among these variables. The results indicate significant and negative relationship between per capita income and electricity theft. Further, electricity price and number of consumers are positively related with electricity theft in the long-run. Economic openness has statistically insignificant relationship with electricity theft. Our findings recommend privatization of electricity distribution companies, establishment of an independent electricity regulator and the introduction of a competitive environment among distribution companies to overcome this issue.